Getting bridging finance is one of the easiest – and quickest – ways by which you can get a ready amount of cash. You can use it for an urgent purchase or to bridge the period between the sale of an existing property and the purchase of another.
But how can you be sure that you’re getting the right amount for your needs? Also, how do lenders compute the interest you need to pay on top of the actual amount of the loan?
This is where bridging loan calculators come in.
What is a Bridging Finance Calculator?
Bridging finance calculators are digital tools used to compute the total cost of a bridging loan. To do so, a user needs to input the relevant property values and the amount they need to borrow.
The resulting computation gives the potential borrower a good idea of how much they can borrow as well as how much they need to pay back.
As with anything related to financial instruments, bridging finance calculators may be affected by a number of factors that can change the total amount one can borrow along with bridging finance rates.
If you’re considering bridging finance, make sure to calculate your bridging loan beforehand. This will allow you to set parameters even before you start shopping around for a lender. Doing so will let you have a good idea of what you stand to get.
Three Good Reasons for Using a Bridging Finance Calculator
If you need to be convinced to use a bridging loan calculator, consider the following factors:
1. It gives you a clearer view of how much you can borrow and how much you need to pay.
The parameters presented in most loan calculators will enable you to get a good (and working) idea of current loan rates and the cost of repayment, both of which may be dependent on the lending institution you’ve chosen to work with.
2. It can help you decide whether or not bridging finance is the best option for your needs.
Many individual and institutional lenders recommend that potential borrowers ought to look into bridging finance calculators even before they start looking for a lender. This is because many calculators currently available online can show people how fluctuations in interest rates affect their repayments.
In which case, it will allow borrowers to decide whether or not bridging finance will work for them. It will also tell them if they need to consider a different kind of loan, such as development finance or a mortgage.
3. It gives you a point of comparison that you can use to decide on which lender to choose.
It’s good to note at this point that different lenders or lending institutions may have different interest rates and repayment terms. Computing the total of your bridging loan using a bridging finance calculator before you start shopping around gives you leverage. It enables you to make comparisons between various companies before ultimately settling on your lender of choice.
Keep in mind, of course, that any information you add to a bridging finance calculator needs to be as accurate as possible to get you the best possible computation.